Small diesel losing its grip? Nigeria debates $30 million for off-grid solar power

The news buzzing around the Intertubes this week shows just how far the solar energy field has come in a few short years. In the latest development, the Nigerian government is considering a $30 million allocation for off-grid solar projects. According to a report in Bloomberg solar panels are an “economic option” for cutting fuel costs in Nigeria, compared to the small diesel generators that currently form the backbone of off grid power generation.

In his former capacity as ExxonMobil CEO, U.S Secretary of State Rex “Silent Bob” Tillerson played up fossil fuel as the only economical way to provide electricity for millions who currently have no access to power. However, the Nigerian example demonstrates that more is at play than meets the eye.

Small Diesel Losing Grip On Nigeria

Nigeria has already been dipping its toe into solar waters, and it appears poised to ramp up its efforts.

Industry stakeholders formed the Renewable Energy Association of Nigeria (REAN) last fall with the aim of seeing “…solar, hydro, biomass and wind contributing 40% of the national energy mix by 2030.”

If approved, the new $30 million round of funding would apply to the important off-grid sector, where small diesel generators dominate.

Nigeria’s new focus on its domestic power market is a significant move because some industry observers have been warning that the country’s domestic electricity consumers have been left “in the lurch” while multinational oil companies send Nigeria’s fossil fuel resources overseas.

That leaves an enormous opportunity for distributed renewable energy development in the country.

As another indication that Nigeria’s energy sector is heading for a sea change, the global renewable energy advocacy organization Power for All established a foothold in Nigeria last year, in support of REAN.

Against this backdrop, REAN is anticipating that the government will allocate $30 million for solar energy development, including solar cell manufacturing and transmission projects in addition to off-grid deployment. A decision on that could come within the next few weeks.

“It just gives you an idea of how the government sees solar as part of the total energy mix,” Aigbokhan said in a telephone interview from Lagos. The country could receive about $2.5 billion of investments in utility-scale solar projects by 2018, he said.

Keep in mind that Nigeria hosts the biggest economy in West Africa, and you can see why investors are eager to, well, invest in the country’s renewable energy portfolio. Here’s the rundown from Bloomberg:

Nigerian officials say they want to generate as much as 1,200 megawatts of off-grid solar. The country’s households and small businesses currently spend about $21.8 billion each year powering diesel generators to generate electricity, according to a study by German development agency GIZ.

Yikes! So much for small diesel.

Radio Silence From REAN — Or Not

If REAN steps up its lobbying efforts, that would be welcome news for skeptics. Last week, an editorial in the industry news organization Off Grid accused the group of dilly-dallying:

Though we accept that it may be too early in the day to call out REAN on the expectations we had of it, we are however constrained to think that REAN may be falling behind in the race to help end energy poverty in Nigeria.

[snip]

Finally, we think that a docile REAN would do no good to the emerging RE sector in Nigeria, and thus urge its members to wake up if they are numb to their responsibilities.

Ouch!

As of this writing, a visit to the REAN website provides some ammunition for the skeptics. The organization has not provided any news releases about its efforts to promote renewable energy since its launch last November.

Meanwhile in Hawaii, diesel is declining too…

Clean tech giant says installation capable of delivering solar power at night has been completed

Tesla has reportedly completed its first major solar storage project since its $2bn acquisition of SolarCity, underlining the electric vehicle giant’s plans to become a major player in the wider clean tech sector.

The company said it has brought online the Kapaia solar and storage project in Hawaii, combining a 13MW solar array with a 52MWh storage system featuring over 270 of Tesla’s Powerpack systems.

The project has secured a 20 year contract with the local Kauai Island Utility Cooperative and promises to deliver power at a cost of 13.9 cents/kWh, significantly cutting the amount the utility pays for diesel power, according to Tesla.

The ability of the new project to deliver solar power generated during the day onto the island’s grid at night is expected to cut diesel use by 1.6 million gallons a year.

The installation further underlines how renewables can undercut traditional fossil fuel power generation, especially in regions such as Hawaii which boasts significant renewable energy resources and high power costs.

The news comes in the same week as Tesla reportedly launched the latest version of its domestic energy storage system, the Powerwall, in Australia.

The Powerwall 2 boasts almost double the capacity of original and is being targeted at the large number of Australian homes that have installed solar arrays.

From the Guardian

Globally there is now 305GW of solar power capacity, up from around 50GW in 2010 and virtually nothing at the turn of the millennium.

The industry called the growth “very significant” and said the technology was a crucial way for the world to meet its climate change commitments.

James Watson, the chief executive of SolarPower Europe, said: “In order to meet the Paris [climate agreement] targets, it would be important if solar could continue its rapid growth. The global solar industry is ready to do that, and can even speed up.”